Pound to Euro Exchange Rate Slips from Highs as Euro Boosted by Recovery Hopes
While the Pound (GBP) outlook remains filled with uncertainties, the Pound Sterling to Euro (GBP/EUR) exchange rate advanced last week. This morning the pair is dipping, but the pair continues to hold most of its recent gains.
After opening last week at the level of 1.1100, GBP/EUR briefly dipped lower to the level of 1.1033 before rebounding. GBP/EUR continued to climb towards the end of the week, ultimately closing the week pretty closely to its weekly high of 1.1188.
This was also the best level for GBP/EUR in around half a month, since mid-June.
Movement has been relatively narrow since markets opened this morning. At the time of writing, GBP/EUR is trending a little below the week’s levels in the region of 1.1155.
Pound (GBP) Exchange Rates Under Pressure as Hopes for Brexit Delay Fade
Investors bought the Pound last week, in reaction to various global and domestic aspects.
As more economies across the globe started to reopen from the coronavirus pandemic, hopes of a recovery helped some currencies to recover slightly.
These hopes persist and are keeping the Pound buoyed. Sterling was also supported last week by some new UK fiscal stimulus announced by UK Chancellor Rishi Sunak.
However, the Pound outlook remains gloomy. Brexit uncertainties will remain even if the coronavirus outlook does improve.
The UK government remains determined to split from EU rules at the end of 2020, regardless of whether or not a deal has been made. According to Cabinet Office Minister Michael Gove:
‘At the end of this year we are leaving the single market and customs union regardless of the type of agreement we reach with the EU. This will bring changes and significant opportunities for which we all need to prepare,’
Euro (EUR) Exchange Rates Steady as Markets Await EU Developments
The Euro (EUR) has been one of the currencies to benefit most strongly from coronavirus hopes in recent months. The Euro outlook remains fairly strong overall, due to hopes for an EU Recovery Fund to be agreed, as well as signs of recovery in Eurozone data.
However, the Euro did slip slightly last week. As some rival currencies like the Pound and US Dollar (USD) edged away from lows, a lack of fresh Euro support meant the shared currency was unable to avoid losses.
For now, Euro investors are awaiting key developments that could influence the Eurozone’s coronavirus outlook in the coming weeks.
Euro investors are eyeing the European Central Bank (ECB) this week. It comes in anticipation of the bank’s anticipated July policy decision on Thursday.
Pound to Euro (GBP/EUR) Exchange Rate Awaits Week of Eurozone News
This week could be a key one for the Euro (EUR) outlook. Many key Eurozone ecostats will be published throughout the week, and the European Central Bank (ECB) policy decision on Thursday could be especially influential.
Tomorrow will see the publication of Germany’s final June inflation rate results. Eurozone industrial production and economic sentiment data from ZEW will also be published.
The main focus for GBP/EUR this week will be the European Central Bank decision on Thursday. Analysts predict that the bank could take a slightly more optimistic tone in the meeting, which would bolster the Euro’s support.
If the bank is less optimistic though, the Euro could weaken and this would make it easier for GBP/EUR to recover higher.
As for Sterling, with July almost halfway over Brexit uncertainty is likely to take increased focus.
UK job market data, due Thursday, could give markets a better idea of how Britain is coping with the pandemic. This may also influence the Pound to Euro (GBP/EUR) exchange rate.
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